If

Fargo Inc. is a carbonated beverage manufacturer that has many manufacturing plants around the world. It is planning to shift fr

Aleksandr [31]

Answer:

For it's natural environment.

Explanation:

3 0

3 years ago

Read 2 more answers

"Gap" insurance a. is a good deal for the buyer. b. pays off the loan balance as well as being very profitable for the dealer. c

Gekata [30.6K]

Answer:

c. is very profitable for the dealer

Explanation:

"Gap'' Insurance pays off the loan balance if the insurance payment is insufficient also it is profitable for dealer as well. Sometime the main insurance claim cannot fufill the loss so those that cannot be fullfill by main insurance are manage by gap insurance.

5 0

3 years ago

A company purchased factory equipment on April 1, 2019 for $160,000. It is estimated that the equipment will have a $20,000 salv

Sedaia [141]

Answer:

The correct answer:

$14,000 (b.)

Explanation:

Depreciation is an accounting method of allocation of cost to a tangible asset, where the recorded cost of a fixed asset is reduced in a systemic manner, until the value of the asset becomes zero is negligible.

In the straight-line basis of calculating depreciation, the difference between the cost of an asset and its expected salvage value is divided by the number of years it is expected to be used.

Mathematically, it is calculated as:

Depreciation of an asset = (purchase price - salvage value) ÷ estimated useful life.

Purchase price = $160,000

salvage value = $20,000

useful life = 10 years

∴ Depreciation = (160,000 - 20,000) ÷ 10

= 140,000 ÷ 10 = $14,000.

This means that at the end of every year, the value of the equipment reduces by a price worth $14,000.

3 0

3 years ago

Which of the following statements is TRUE with regard to gross margin?

Naddik [55]

ANSWER: (A)

EXPLANATION: Gross margin is the difference between revenue and cost of goods sold divided by revenue. Gross margin is expressed as a percentage. Generally, it is calculated as the selling price of an item, less the cost of goods sold. Gross Margin is often used interchangeably with Gross Profit, but the terms are different.

7 0

4 years ago

On July 1, 2020, Sarasota Company purchased for $5,760,000 snow-making equipment having an estimated useful life of 5 years with

SpyIntel [72]

Answer:

1. We have:

Depreciation expense for 2014 = $920,000

Depreciation expense for 2015 = $1,472,000

2. We have:

Depreciation expense for 2014 = $1,152,000

Depreciation expense for 2015 = $1,843,200

3. Depreciation expense for 2016 = $1,972,000

Explanation:

1. Sum-of-the-years'-digits method.

Depreciable amount = Equipment cost – Salvage value = $5,760,000 - $240,000 = $5,520,000

Sum of the year digits = 5 + 4 + 3 + 2 + 1 = 15

Depreciation expense for a year = Depreciable amount * (Remaining years / Sum of the year digits) ………. (1)

Using equation (1), we have:

Depreciation expense for 2014 = $5,520,000 * (5 / 15) * (6 / 12) = $920,000

Depreciation expense for 2015 = $5,520,000 * (4 / 15) = $1,472,000

Accumulated depreciation at the end of 2015 = $920,000 + $1,472,000 = $2,392,000

Therefore, we have:

Sum-of-the-Years'-Digits Method 2014 2015

Equipment $5,760,000 $5,760,000

Less: Accumulated Depreciation (920,000) (2,392,000)

Year-End Book Value 4,600,000 3,128,000

Depreciation Expense for the Year 920,000 1,472,000

2. Double-declining balance method.

Depreciable amount = Equipment cost – Salvage value = $5,760,000 - $240,000 = $5,520,000

Double-declining depreciation rate = Straight line depreciation rate * 2 = (1 / Number of estimated useful life) * 2 = (1 / 5) * 2 = 0.40, or 40%

Depreciation expense for 2014 = Equipment cost * Double-declining depreciation rate = $5,760,000 * 40% * (6 / 12) = $1,152,000

Depreciation expense for 2015 = (Equipment cost - 2014 Depreciation expense) * Double-declining depreciation rate = ($5,760,000 - $1,152,000) * 40% = $1,843,200

Accumulated depreciation at the end of 2015 = $1,152,000 + $1,843,200= $2,995,200

Note that under Double-declining balance method, the salvage value is not considered until the last year of the asset.

Therefore, we have:

Double-Declining Balance Method 2014 2015

Equipment $5,760,000 $5,760,000

Less: Accumulated Depreciation (1,152,000) (2,995,200)

Year-End Book Value 3,456,000 2,073,600

Depreciation Expense for the Year 1,152,000 1,843,200

3. Compute the amount of depreciation expense for the 2016 income statement.

Straight line depreciation rate = 1 / Number of estimated useful life = 1 / 5 = 0.20, or 20%

Depreciable amount = Equipment cost – Salvage value = $5,760,000 - $240,000 = $5,520,000

Depreciation expense for 2014 = Depreciable amount * Straight line depreciation rate * (6 / 12) = $5,520,000 * 20% * (6 / 12) = $552,000

Depreciation expense for 2015 = Depreciable amount * Straight line depreciation rate = $5,520,000 * 20% = $1,104,000

Accumulated depreciation at the end of 2015 = $552,000 + $1,104,000 = $1,656,000

Net book value at end of 2015 = Equipment cost - Accumulated depreciation at the end of 2015 = $5,760,000 - $1,656,000 = $4,104,000

Depreciation expense for 2016 = (Net book value at end of 2015 - New Salvage value) / Remaining useful years = ($4,104,000 - $160,000) / 2 = $1,972,000

8 0

3 years ago